One of the reasons we ask dealers for comments when we conduct industry surveys is because they give the aggregated numbers of the survey some “color.” Another way to say it is they add context to the compiled data.
Sometimes these comments say more in a few words than we ever could with a bunch of raw numbers or even a full story. Unless we have permission to directly quote the person, we usually keep controversial or revealing comments anonymous for obvious reasons.
One example is the dealer who recently offered his thoughts on the used combine inventory situation. He said, “I think the market could get much worse for combines in the coming months. There is no way that the industry can build even 50% of last year’s build with 100% of sales still in used combine inventory. Dealers cannot just pile up used combines without a market. I feel the market may take 3 years to recover, if ever, to the same build numbers.”
When we asked for permission to quote him he said, “You can post these comments, but I would not want my name or dealership associated with them. Sorry, but in this day and age it is hard to speak your honest opinion and not be penalized for your honesty.”
We all know what he’s talking about without any further explanation.
A couple of years ago, a dealer contacted us to report how he had been duped by an auction company that he contracted with to sell some excess inventory of tractors. He lost a few hundred thousand dollars in the deal and wanted us to alert other dealers to the scam, but he didn’t want to be named. He said, “I don’t want to be known as the dumbest dealer in North America.”
In the most recent Ag Equipment Intelligence Dealer Sentiments & Business Conditions Update, we received another candid comment from a dealer who, quite frankly, admitted he made a decision on some used machines that cost him a lot of money.
“Dumped $500,000 at auction; lost $200,000. It’s gone though and we’re not paying [any] interest. We’re still on the high side but [it’s] bearable now.”
Why do all of these comments involve used equipment?
In any case, do comments like these tell you all you more about the current state of the used equipment market than all of the numbers could ever reveal? I think so.
So we don’t discriminate against new equipment, here are a few comments that describe the situation there.
“0 combines on order, 0 4WD tractors on order, 0 sprayers on order.”
“My major supplier is more interested in short-term financials and has lost sight of the sales trend for the coming months.”
“For 2015, my expectations are that it will be 30% lower in dollars and only down by 10% in unit sales. We expect more lower priced livestock equipment will be sold. For the remainder of 2014, sales will drop 20% from last year.”
But there are some dealers who will always see a silver lining (or an opportunity) when others can’t see any upside.
“We are in dairy country and milk prices are high. We are confident our sales will be strong for year-end.”
“Case IH has emphasized a new devotion to pre-sell retail orders. They are even stating that the discounts will be greater on pre-sell orders than on inventory orders. This has driven a strong desire to commit to this program ourselves.”
“We have talked to a lot of people throughout the year and there is a lot of interest with the income tax law changing and their need to spend money before year-end.”
“We are operating under the assumption that Section 179 will return come the end of November.”
Do you see what I mean by comments adding “color” and “context?”